Along with plans to auction off leases for hundreds of its retail outposts, Party City's efforts to wind down operations and shed all remaining assets will also include the deal for its corporate campus.
With help from real estate adviser A&G Real Estate Partners, the Woodcliff Lake, New Jersey-based retailer is looking to reassign the lease for its main office at 100 Tice Blvd. The roughly 209,000-square-foot property has housed the now-bankrupt company's headquarters for nearly half a decade. The listing for the property hit the market earlier this month, according to materials viewed by CoStar News, and is available through a term that extends through October 2038.
"We are looking to sell the lease assignment," A&G Senior Managing Director Mike Matlat told CoStar News of the plans, which widen Party City's liquidation efforts in the aftermath of its Chapter 11 bankruptcy filing late last year.
Party City signed the full-building deal for its New Jersey headquarters in 2021 and moved in the following year, according to CoStar data.
When Party City decided to relocate its headquarters to Woodcliff Lake, it was considered a big win for the Garden State and made it possible for the retailer to consolidate its operations in Elmsford and Rockaway, New Jersey, at one location. It was also awarded a nearly $10 million incentive package from the New Jersey Economic Development Authority, which estimated the relocation would generate economic benefits more than four times as large as the tax credits.
Party City was originally expected to invest about $32 million into the area.
But in March last year, the tax incentive award was withdrawn because Party City was unable to meet its minimum employee commitment, an EDA spokesman said in an email to CoStar News.
Up for grabs
A&G marketing materials tout the property as being "strategically located in a prominent business hub [that] offers excellent accessibility and ample space. This is an ideal opportunity for businesses seeking a headquarters or large-scale office solution."
In addition to the headquarters lease, A&G will hold an auction for 695 Party City leases in 44 states across the country, pending court approval.
Straddled with more than $1.7 billion in debt, the national party goods retailer attributed its recent bankruptcy move to "an immensely challenging environment driven by inflationary pressures on costs and consumer spending."
The Party City auction is part of the aftermath of last year's stream of retailer Chapter 11 filings, chain liquidations and store closings, as the industry was pummeled by high interest rates increasing their costs, consumers tightening their purse strings amid high inflation, and the aftershocks of the pandemic. The retailers that went out of business included 99 Cents Only, Sam Ash Music, American Freight, Conn's HomePlus and Badcock Home Furniture & More.
Party City made headlines on Dec. 20 last year — just a few days before Christmas — when it told the roughly 400 corporate employees at its headquarters that they were immediately being laid off with no severance pay as the company was winding down its business. The next day, the retailer filed for Chapter 11 bankruptcy protection — for the second time in less than two years — and said it was closing about 700 stores.
A group of the headquarters workers have filed a 36-page class action complaint in bankruptcy court over their dismissals. The workers allege that Party City failed to give them notice of their layoffs as required by the U.S. Worker Adjustment and Retraining Notification Act and didn't pay them any compensation in lieu of that notice.
The employees are also seeking additional relief. That includes 60 days' wages and pension contributions, severance of one week's pay for each year of employment, an additional four weeks' pay as required by state labor law and damages of 200% of the unpaid severance.
Party City did not respond to CoStar News' multiple requests for comment.